An Overview of Circular 230 Disciplinary Proceedings

Tax Professionals' Resource July 11, 2012 — 2,480 views

Circular 230 disciplinary proceedings enable tax agents, attorneys and other professionals to be recognized as official representatives working on behalf of taxpayers before the Internal Revenue Service (IRS). Knowing how these proceedings work will help you practice in front of this agency.

You'll need to be able to prove that you are legally allowed to perform duties such as preparing and filing tax documents, delivering tax advice and representing your client at conferences and other events. Maintaining accurate records will help you during any legal proceedings, as you will be able to show that you have completed specific tasks for consumers. Understanding the restrictions of your practices may prove beneficial to verify that you followed the rules while working on behalf of your client.

You'll need to know your role in the proceedings. Such occurrences apply to those who practice before the IRS, but fail to comply with federal regulations. Information must be collected against a practitioner before a formal complaint can be filed with the Office of Professional Responsibility (OPR), which enforces the IRS' regulations.

The practitioner will have the opportunity to settle the matter in a pre-proceeding stage, but the OPR will conduct an investigation if any serious misconduct occurred. Meanwhile, the practitioner could face censure, disbarment or suspension in such a situation.

Formal proceedings will review all of the evidence involved in a case, and the Office of the Associate Chief Counsel determines disciplinary action, if any is necessary. An administrative law judge could become involved if the case needs to be escalated based on the testimony of witnesses.